13-11. Prepare 2014 entries for Crow assuming that the warranties are not an int
ID: 2715089 • Letter: 1
Question
13-11. Prepare 2014 entries for Crow assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $160,800 relates to sales of warranty contracts. Crow estimates the total cost of servicing the warranties will be $191,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
13-5. B. Matt Broderick Company began operations on January 2, 2013. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 9 paid vacation days and 8 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.
Actual Wage Rate Vacation Days used by each Employee Sick days used by each employee
Matt Broderick Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned.
A. Prepare journal entries to record transactions related to compensated absences during 2013 and 2014. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(CR) Cash 9072
Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2013 and 2014.
ACCOUNT DEBIT CREDIT TO RECORD SALE TO RECORD THE WARRANTY EXPENSE TO RECORD THE ESTIMATED REVENUESExplanation / Answer
Journal Entries for Warranties:
Account Title Debit Credit Cash 160,800 Sales 160,800 (To record sales) Warranty Expenses 191,000 Warranty Liabilities 191,000 (To record the warranty expenses) Cost of Sales 30,200 Revenue 30,200 (To record the estimated revenue)Related Questions
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